I have this brilliant idea

Please flame.

I was thinking, is it possible to take out multiple 401k's? Like what if you took one out (i believe it costs $2k to start one) and then once it was worth $4k you cash it out and start 2 401k's, once those are worth $4k you cash those out and start 4 401k's, and so on. Would this work?

Sure but you'd probably lose more to management fees than just keeping it in one. Plus cashing it out has tax penalties so unless you rolled it over, you're going to pay huge taxes just cashing it out.

Why would you do this? You're taxed on withdrawal PLUS you have to pay management/startup fees. They don't GIVE you money to start one. This kind of scheme only works if signing up for the account gets you free money of some sort. 401(k)s do not give you free money, they cost a lot to establish because they're designed to grow over decades.